EPA News Update - October 2011

 

As mentioned in some recent updates, EPA negotiations had largely come to a standstill over the last year. The period of calm is now over. Frustrated with the lack of progress in the EPA negotiations, the EU has decided to step up the pressure on the ACP countries. On 30th September the European Commission adopted a proposal amending Regulation 1528 of 2007 governing the market access of 36 ACP countries to the EU. The proposal for amendment foresees that the 36 countries either have to ratify and implement EPAs or the duty free/quota free access of their goods to the European market will be revoked by 1st January 2014. The proposal needs to be adopted by the Council and by the European Parliament to become effective. Resolution 1528 had been adopted in 2007 as a temporary solution to allow for more time to conclude the EPA negotiations and the ratification process.

 

The resolution of 2007 allows the 36 ACP to benefit from duty free/quota free access to the European market. Of these 36 countries 18 (14 Caribbean countries, Madagascar, Mauritius Seychelles and Papua New Guinea) are seen as "good guys" by the Commission, meaning they have taken the necessary steps towards the ratification of the EPA.

 

Of the other 18 "bad guys" Burundi, Ghana, Kenya, Namibia, Rwanda, Tanzania, Uganda and Zambia, have concluded negotiations but have not signed their respective Agreements. Botswana, Cameroon, Fiji, Haiti, Ivory Coast, Lesotho, Mozambique, Swaziland, and Zimbabwe have signed but have not taken the necessary steps towards ratification of their respective Agreements. They now face the choice of either ratifying and implementing an EPA or being removed from the market access regulation.

 

The impact of being removed from the market access regulation would be different for the various countries. Burundi, Comoros, Haiti, Lesotho, Mozambique, Rwanda, Tanzania, Uganda and Zambia are Least Developed Countries (LDCs) and could therefore continue to benefit from duty free/quota free access to the European market thanks to the European Union's ‘Everything But Arms’ (EBA) scheme. These countries have therefore little to worry about.

 

Cameroon, Fiji, Ghana, Ivory Coast, Kenya, Swaziland and Zimbabwe are low income or lower middle income countries and would revert to the EU's Generalised System of Preferences (GSP). The Generalised System of Preferences is a trade arrangement through which the EU provides preferential access to the EU market to developing countries and territories. This takes the form of reduced tariffs for their goods when entering the EU market. There is no expectation or requirement that this access be reciprocated. It has however to be noted that this represents an increase of tariffs for ACP countries, which hitherto have benefited from duty free access to the EU market. These countries would therefore face serious consequences if they did not sign an EPA.

 

Botswana and Namibia are in an even trickier situation. They are upper middle income countries and, according to the European Commission's current proposal for reform of the GSP, would no longer classify for GSP. They would therefore revert to the higher, normal level of tariffs on their exports to the EU. It has to be noted that the proposal for reform of the GSP was presented by the Commission only recently and has yet to be approved by the Council and the Parliament. This will take quite some time and amendments to the original proposal are likely. Nevertheless, the situation is worrisome for the two countries at the moment.

 

The Commission's move to revise the Market Access Regulation of 2007 displays a total incapacity to address the root causes that led to the stalemate in the first place. There are good reasons why the EPA process has come to a standstill, first and foremost because EPAs, as they are conceived today by the European Commission are not in the interest of Africa. They propagate a free trade logic which serves the interests of European business, but not the legitimate development aspirations of Africans. Instead of being able to acknowledge that the process had been flawed from the outset and coming up with new proposals the European Commission limits itself to increasing the pressure on African governments, while pushing ahead with the same failed agenda.

 

Thomas Lazzeri